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Venkatachala Mudaliyar Vs. Balambal - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Judge
Reported inAIR1984Mad363
ActsTamil Nadu Debt Relief Act, 1979 - Sections 17, 17(6) and 17(7); Code of Civil Procedure (CPC), 1908 - Sections 35; Legal Practitioners Fees Rules, 1973 - Rule 7(2)
AppellantVenkatachala Mudaliyar
RespondentBalambal
Appellant AdvocateS.V. Jayaraman, Adv.
Respondent AdvocateV. Shyamalam, Adv.
Excerpt:
.....file application for declaration of amount of debt - such application cannot partake character of suit - debtor deposited amount in court - court obliged to grant certificate of discharge - section 35 enable court to award costs in proceeding arising out of section 17 - section 35 related to award of costs along with counsel's fee - counsel's fee to be computed according to rules laid down in legal practitioner's fees rules and if it is not according to it then application must be amended. - - 2. that application was resisted by the respondent herein who contended that the court fee and counsel's fee included in the decree were in accordance with the provisions of the act as well as the legal practitioners' fees rules and that no case for amendment as prayed for by the petitioner..........(d) of the act, which indicated that the nature of the adjudication was not something akin to a decree in a suit and, therefore, the counsel's fee, as in -a suit, ought not to have been allowed to be incorporated in the decree. on the other hand, the learned counsel for the respondent contended that the absence of any specific provision in the act relating to. the allowance of counsel's fee would not preclude the court from awarding costs in its discretion in any proceeding and since the whole gamut of the procedure relating to the trial of a suit in accordance 'with the provisions of the code of civil procedure has to be gone through, even for the purpose of declaring the amount due tinder s. 17(l) of the act, the award and the inclusion of counsel's, fee as in a suit, was quite in.....
Judgment:
ORDER

1. This civil revision petition at the instance of the respondent in 0. P. 13 of 1981, District Munsif's Court, Villupuram, has been preferred against the order dismissing the application filed tinder Ss. 151 and 152, C.P.C., praying for an amendment of the decree. 0. P. 13 of 1981 was an application filed by the respondent herein under S. 17(l) of the Tamil Nadu Act XL of 1979 (hereinafter referred to as the Act) praying for a declaration of the amount due under a promissory note executed by the petitioner, who was a debtor under the Act. On 25-2-1984, after a consideration of the evidence led in by both sides, the learned District Munsif declared the amount due by the petitioner to the respondent at Rs. 14339 with interest at 9%) per annum on Rs. 8800 from the date of the filing of the 0. P. viz. 8-9-1979 and subsequent interest at WYO per annum, till date of the discharge. 15 days time was granted to the respondent for the payment of court-fee and there is no dispute now that the respondent paid a sum of Rs. 107550 as court fee on the amount declared and also obtained a decree under S. 17(5) of the Act, However, in- the decree, a sum of Rs. 880 was also included as counsel's fee. The petitioner filed I.A. 53 of 1984 under Ss. 151 and 152, C.P.C. claiming that the declaration of the amount due under S. 17(4)(a) of the Act would not amount to a decree and that since the proceedings were commenced by the filing of an 0. P., the counsel's fee should not have been allowed at Rs. 880, as in a suit, but should have been fixed only either at Rs. 35 or Rs. 50, as in the case of 0. Ps. generally. Besides, the petitioner also claimed that the court fee of Rs. 1075-50 included in the costs should also be deleted. Accordingly, the petitioner prayed that the decretal order should be amended in the manner claimed by the petitioner.

2. That application was resisted by the respondent herein who contended that the Court fee and counsel's fee included in the decree were in accordance with the provisions of the Act as well as the Legal Practitioners' Fees Rules and that no case for amendment as prayed for by the petitioner was made out. The respondent also put forth the plea that only after the payment of Court fee she had obtained a decree under the Act and, therefore, the petitioner was not in order in claiming that the adjudication secured by the respondent after the payment of the Court fee did not have the effect of a decree as such.

3. The learned District Munsif, Villupuram, who enquired into this application, was of the view that the inclusion of the 'Court fee paid by the respondent and the counsel's fee was in accordance with the provisions of the Act and the Legal Practitioners' Rules and. therefore, no case for amending the decree has been made out. In that view, I.A. 53 of 1984 in 0. P. 12 of 1981 was dismissed. It is the correctness of this order that is challenged in this Civil revision petition.

4. The only contention urged by the learned counsel for the petitioner in this civil revision petition is that the Court below was in error in baying allowed the counsel's fee in the decree in the manner done, as if the proceeding before the Court was a contested suit, in which a decree was passed. Attention was also drawn by the learned counsel for the petitioner to S. 17(6) and (7) of the Act to contend that the costs contemplated by the provisions of the Act may include at best only the Court fee, if any, paid by the creditor and not counsel's fee. Reference was also made to S. 2-5 of the Act to support a plea that though a Court may grant a decree under S. 17(5) of the Act on the payment by the creditor of the court fee payable, yet, such a decree was not an appealable one under S.. 25(l)(c) and (d) of the Act, which indicated that the nature of the adjudication was not something akin to a decree in a suit and, therefore, the counsel's fee, as in -a suit, ought not to have been allowed to be incorporated in the decree. On the other hand, the learned counsel for the respondent contended that the absence of any specific provision in the Act relating to. the allowance of counsel's fee would not preclude the Court from awarding costs in its discretion in any proceeding and since the whole gamut of the procedure relating to the trial of a suit in accordance 'with the provisions of the Code of Civil Procedure has to be gone through, even for the purpose of declaring the amount due tinder S. 17(l) of the Act, the award and the inclusion of counsel's, fee as in a suit, was quite in order. It was further pointed out that though S. 17(7) refers to costs ordered to be paid under S. 17(6) which took in the court fee, if any, paid by the creditor, yet, in the absence of any clear indication in S. 17 to the effect that counsel's fee ought not to be allowed, and included as part of the costs of the proceeding, the Court could always exercise a discretion and award costs in a proceeding under S. 17 of the Act. The further submission of the learned counsel for the respondent was that the appealability or otherwise of an order under S. 25 of the Act as if it were a decree was not really decisive of the character of the adjudication, as that provision accepts the nature of the adjudication as an order, as ordinarily understood, but equates it by fiction to one relating to execution, discharge or satisfaction of the decree within the meaning of S. 47, C.P.C. for purposes of an appeal, despite the deletion from the scope of the definition of a decree under S. 2(2), C. P. C. a n adjudication under S. 47 C.P.C.

5. There is no dispute that the proceedings in 0. P. No. 13 of 198 1, originated by means of an application under S. 17 of the Act. There was, therefore, no question of the respondent having instituted a suit, as ordinarily understood, for that purpose. It is common knowledge that a, suit is always preceded by the presentation of a plaint in accordance with the provisions of 0. 7, C.P.C. The proceeding initiated in this case by the respondent was to enforce a special statutory remedy and not an ordinary common law right and necessarily, the respondent had to conform to the procedure as laid down in (fie Act. In other words. the respondent availed herself of the remedy under S~ 1-/i 1) of the Act for a declaration of the amount due to her on the footing that the petitioner was a debtor on the date of the application and that the debt had also been incurred prior to 14-7-1978. No doubt, the proviso to S. 17(l) indicates that such an application cannot be presented or maintained, if a suit for the recovery of the debt was pending. That proviso is understandable, for, if a suit for the recovery of the debt was pending before a Court, the amount due could be decided in the course of the trial of the suit and there was no need for any independent application for a declaration of the amount due under the transaction in respect of which the suit was pending already. That the proper method of invoking the jurisdiction of the Court for a declaration of the amount due under S. 17(l) of the Act is by means of an application is indicated in the proviso to S. 17(l) as well as S. 17(4)(a) and (b) of the Act. The right to move the court for a declaration of the amount due by means of an application is made available under S. 17(l) of the Act to the debtor or the creditor and under S. 17(2) of the Act to any person claiming to be a debtor, who contends that the debt due by him, has been discharged. To such an application S. 17(3) of the Act directs that all persons, who would have been necessary parties to a suit for the recovery of the debt, should also be impleaded as parties. Under S. 17(4)(a) of the Act, a duty is cast on the Court first to decide the question whether the person from whom the debt is due was a debtor or not and if such a person is found to be a debtor, the court is further enjoined to pass an order declaring the amount due by him or declaring that the debt had been duly discharged. S. 17(4)(b) of the Act obliges the Court to dismiss such an application, if it is found that such a person was not a debtor. Ordinarily, therefore, on an application being made either by a debtor or a creditor, the Court can, after finding that the person from whom the debt is due was a debtor, either declare the amount due by him or declare that the debt had been discharged. A mere declaration to that effect, ordinarily, would not enable the creditor to recover the amount so declared due from the debtor. That is why, provision is made under S. 17(5) of the Act, in a case where the Court passes an order under S. 17(4)(a) -declaring the amount due by the debtor to the creditor, to enable the creditor, on payment of the Court fee payable for the amount declared due, to secure a decree for such amount. A proviso thereunder confers on the creditor an option to secure a decree for an amount less than that declared on payment of the appropriate court fee. It is thus seen that it is open to the creditor in a case where the amount is declared due from the debtor to pay the court fee and also secure a decree for the amount so declared. A creditor may also not desire to avail himself of the benefit of securing a decree. In other words, to be satisfied with a declaration of the amount or to further secure a decree thereon by payment of court fee; is a matter of choice by the creditor. There is nothing in S. 17(5) of the Act which indicates that in all cases where the creditor gets a declaration, he is also bound to apply for a decree, for the amount so declared, for, it may well be that on the declaration of the amount due to the creditor, a debtor may pay that amount, so that there is no further need for the creditor to realise the amount declared by resort to the process of execution. This is also contemplated by the opening part of S. 17(7) of the Act. Under S. 17(6) of the Act, in a case where the court fee is paid by the creditor for obtaining a decree against the debtor in respect of the amount declared to be due, the court is empowered to direct the debtor to pay the court fee in addition to the amount decreed. Again, under S. 17(7) of the Act, if a debtor pays the amount of the decree together with the cost, if any, ordered to be paid under S. 17(6) the Court shall grant to the debtor a certificate of discharge of the debt. S. 17(8) of the Act lays down that the procedure in the Code of Civil Procedure for the trial of suits shall, as far as, may be applied to the application under S. 17 of the Act. S. 17(9) of the Act interdicts suits at the instance of the creditor being entertained for the recovery of a debt, if an application in respect of such a debt under S. 17( 1) of the Act has been made before a court having jurisdiction and is pending or if an order tinder S. 17(1)(a) had been passed by a Court having jurisdiction in respect of such debt. S. 17(10) providing for exclusion of time for computing the period of limitation is not relevant for the present purpose.

6. A conjoint and integrated reading of the provisions above referred to clearly points out that the initiation of proceedings for a declaration of the amount of the debt or for an order to the effect that the debt is discharged,' either by the creditor or the debtor, as the case may be, is done by means of an application and not by a suit. It is true that the procedure laid down in the Civil P. C. with reference to the trial of suits should be adhered to in the hearing of an application made under S. 17(l) of the Act. Even so, such an application does not partake the character of a suit as such. Besides that, the adjudication by itself does not tantamount to a decree, as indicated by S. 17(5) of the Act. There may be creditors and debtors who may be satisfied with a mere declaration regarding the amount due under the debt or a discharge pleaded by a debtor. In a case where the amount is declared as payable to the creditor by the debtor and that amount is paid by the debtor into Court, then, under the first part of S. 17(7) of the Act, the Court is obliged to grant a certificate of discharge of the debt to the debtor: but a declaration under S. 17(4)(a) of the Act would not, by itself, however, enable the creditor to recover the amount from the debtor and in order to make the amount declared recoverable from the debtor, an enabling provision has been made under S. 17(5) of the Act to facilitate the obtaining of a decree by the creditor on payment of the Court fee payable on the amount declared due. In other words, the declaration, which is really the effective adjudication, is one under S. 17(4)(a) and that is why it 'is made appealable under S. 25 (1)(c) of the Act, as if it was an order which related to the execution, discharge or satisfaction of the decree within the meaning of S. 47 of the Civil P. C. Similarly in a case where the court finds that a person is not a debtor, then, the Court is bound to dismiss the application for a declaration of the amount or for the discharge of the debt, as the case may be. Such an order also has been made appealable under S. 25(1)(d) of the Act. It is thus seen that it is the declaration passed by the Court under S. 17(4)(a) or (b) of the Act which affects the right of parties and that is why, those orders have been made appealable and not an order under S. 17(5) of the Act, which merely enables the creditor to obtain on the strength of the declaration a decree with a view to recover the amounts declared due from the debtor. In this case, there is no dispute that the amount due to the respondent had been declared and the respondent had also paid the court fee thereon and under the terms of S. 17(6) of the Act, the petitioner was bound to pay the court fee also, in addition to the amount decreed in favour of the respondent.

7. No doubt, S. 17(7) of the Act speaks of costs ordered to be paid under S. 17(6) of the Act and this would, ordinarily take in, the court fee paid by the creditor to get a decree for the amount declared due. However, there is absolutely no indication whatever in S. 17(7) of the Act that counsel's fee is totally excluded or that the court cannot award any reasonable fee to counsel, having regard to the contest in the proceedings. The provision under S. 17(8) of the Act relating to the applicability of the procedure in C.P.C would, in my view, attract S. 35 of the Civil P. C. and would enable the court to award costs in a proceeding arising under S. 17 bf the Act, though such cases have not been specifically referred to and provided for under that section. It has also to be pointed out that there is no indication in the provisions of the Act that counsel's fee normally forming part of the costs, should be totally excluded in adjudicating applications under S. 17 of the Act. In the absence of any such provision in the Act, the costs of the proceedings should be in the discretion of the court and the court, ordinarily has power to determine by whom and to what extent the costs are to be paid. Under those circumstances, the contention of the learned counsel for the petitioner that no costs at all, except to the extent provided for under S. 17(6) of the Act can be allowed, 'is unacceptable. Certainly, the learned counsel for the petitioner is well founded in his contention that the counsel's fee cannot be on the footing of a contested suit, because factually and also in law, the proceedings have commenced only by an application and not in the manner of a suit. However, in the absence of any specific provision in the Act, the procedure under S. 35, C.P.C. relating to the award of costs along with the Legal Practitioners' Fees Rules would apply and the counsel's fee would be provided for and allowed even in proceedings under S. 17 of the Act, though not in the scale of a contested suit. Learned counsel on both sides were asked whether there is any specific rule in the Legal Practitioners Fees Rules which would be applicable to a proceeding of the kind dealt with here and they frankly submitted that there is no specific rule at all, which could be invoked to support the allowance of counsel's fee in matters arising under S. 17 of the Act. On a perusal of the Legal Practitioners' Fees Rules, 1973, it would appear that R. 7(2) would cover the case of an application arising under S. 17 of the Act. Though that rule contemplates proceedings under S. 47, C.P.C., yet, in view of S. 25 of the Act, equating the effect of an order under S. 17(4)(a) and (b) of the Act, to an adjudication relating to the execution, satisfaction or discharge of a decree within the meaning of S. 47, C.P.C. R. 7(2) of the Legal Practitioners' Fees Rules, 1973, can be applied to proceedings under S. 17 of the Act, in which case, the minimum fee and maximum fee in a Munsif s Court shall be Rs. 15 and Rs. 74 and the minimum fee and the maximum fee in a sub-Court or a District Court shall be Rs. 25 and Rs. 250 respectively. Since in the course of adjudication upon the amount due by the debtor to the creditor or even in recording a finding regarding the discharge of a debt, the Court is obliged to try the application almost as if it were a suit in the sense that oral as well as documentary evidence on both sides is recorded and received and arguments are heard in support of the rival contentions as in a suit, the question of including counsel's fee as part of the costs in an application under S. 17 of the Act has to be viewed with a certain liberality which would favour the award of a reasonable fee as counsel's fee rather than a stringency resulting in almost a negligible amount being awarded by way of counsel's fee. Considering this, it would meet the ends of justice, if the counsel's fee in an application under S. 17 of the Act is fixed at the higher figure of Rs. 75 in so far as the Munsif's court is concerned and Rs. 250 in a sub-Court or a District Court, as the case may be. Applying this to the present case, the Court below was in error in having declined to amend the decree in so far as it related to the inclusion of the counsel's fee to the tune of Rs. 880. In view of the above, the counsel's fee in the present case ought not to have been fixed and allowed on the contested scale as in a suit, but should have been allowed to the extent of Rs. 75. Accordingly, the decree granted by the Court below will stand amended and the respondent will be entitled to recover only a sum of Rs. 117950 towards costs and not Rs. 1984-50, as the counsel's fee of Rs. 880 allowed and included cannot be justified and only -Rs. 75 should have been allowed instead. Consequently the civil revision petition is allowed in part to the extent indicated. There will be no order as to costs.

8. Revision allowed partly.


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